An individual transferred an immovable to his corporation for non-share consideration, and after being reassessed by CRA for the resulting gain, filed a late s. 85(7) election showing preferred share consideration and proposed to validate such late election by entering into a "deed of correction" with the corporation providing for the shares’ issuance. CRA stated:
[T]he CRA will not accept changes to the terms of a contract made after the fact that have the effect of altering the basis upon which an assessment was made, unless a court order is made to that effect.
... [E]ven if the "deed of correction" of the Contract …were to be entered into … CRA could not take it into account for the purposes of determining the tax consequences of the transfer of the Immovable. Consequently, CRA would not be able to accept a late election filed by the taxpayer and the Corporation under subsection 85(7) since, based on the Contract initially entered into … one of the conditions set out in subsection 85(1) (i.e., the issuance by the Corporation of share consideration) would not have been satisfied.